Epoxy was modified by an incompletely condensed polyhedral oligonieric silsesquioxane (POSS), and the phenyltrisilanol POSS [Ph7Si7O9(OH)(3), POSS-triol] was incorporated into the epoxy networks with the content of POSS up to 30 wt %. The organic-inorganic hybrid composites were prepared via in situ polymerization of epoxy monomers in the presence of POSS-triol, which started from the homogeneous solutions of POSS-triol and epoxy monomers. The nanocomposites of epoxy with POSS-triol can be prepared with the metal complex, aluminum triacetylacetonate ([Al]) being used as the catalyst for the reaction between POSS-triol and diglycidyl ether of bisphenol A (DGEBA). Otherwise, the phase separation induced by polymerization occurred, and the fine phase-separated structures were obtained, in which the spherical POSS-triol particles (0.3-0.5 mu m in diameter) were dispersed in the continuous epoxy matrices. The hybrid composites with the different morphological structures displayed quite different thermomechanical properties. The phase-separated composites possessed the higher glass transition temperatures (T-g's) than the nanocomposites while the nanocomposites displayed the higher storage modulus of glassy state in light of dynamic mechanical analysis (DMA). In terms of therniogravimetric analysis, the nanocomposites displayed the higher initial thermal decomposition temperatures (T-d's). The improvement in thermomechanical properties has been ascribed to the nanodispersion of POSS moieties.